I plan on filing an EB-5 application in a new company with a startup capital of $250,000 in a “rural area.” I know the requirement is $500,000, but if I forecast cash flows and by the end of the two year period when I get a conditional green card, add an additional $250,000 to make the investment $500,000, what are my chances of getting approved?
You must prove that you are "committed" to make the full investment. If the rest of the $250,000 is not put at risk, your petition cannot be approved. You need to work out a plan with an experienced EB-5 attorney.
The investment criteria is clear and it is not based upon money earned from the project.
While your idea sounds creative, the USCIS will not approve it because it does not meet the financial requirement for establishing a new company in a rural area. At the time you file your Form I-526, application for EB-5, you must have $500,000 ready to invest. Piecemeal investments are not allowed. Advisably, consult an EB-5 attorney for further information on how to organize and properly seek an EB-5 visa.
Based upon EB-5 regulations and policy you will need to have the full required amount of $500,000 either in the escrow account or the New Commercial Enterprise (NCE) at the time of filing the immigrant investor petition. That is, this will be the basis to show the USCIS that you have invested or are in the process of investing the required amount.
You will put your I-526 petition at significant risk of being denied if you are not able to demonstrate that you are actively in the process of investment. If cash flow in the company is not your personal distribution, you may not use it to demonstrate you are actively in the process of investment. From a practical standpoint, you must have evidence that the entire amount ($500,000) is at risk before your I-526 petition is approved.
You will not get the conditional green card unless you have invested the required capital.
While the EB-5 law and regulations allow an investor to be "in the process of investing," in reality, the full amount of investment capital must be at risk before the I-526 petition will be approved. Therefore, your proposed investment schedule probably will not work. If you make the initial investment of $250,000 and then show a plan to invest the remaining funds within the next year, you might have a chance because the USCIS might issue a request for evidence (at the one-year processing stage) and you could provide evidence that the additional capital was invested, but you would be taking a considerable risk because the USCIS might find that the petition was not approvable at the time it was filed (not all of the capital was invested). Also, if you are relying on cash flows from the new commercial enterprise to make up the remaining $250,000, you would need to take those funds personally as a taxable distribution of income and then reinvest them into the company. You cannot just show a $250,000 profit in the company and have that count as the rest of your EB-5 investment.
Unfortunately, you will not have your conditions removed without meeting all the EB-5 requirements, i.e. invest the total $500,000.
No. The required entire amount of $500,000 for a rural area has to be already invested in the new commercial enterprise and at risk at the time your I-526 petition is filed.
Zero chance of approval unless you have the $500,000 in the company when you file the I-526. The $500,000 can be a combination of cash in the company bank account (or in escrow) and equipment, land, or other real assets you have contributed to the company. These assets will need to be appraised by an expert according to "fair market value."
An investor must have invested or be in the process of investing. The regulations state "To show that the petitioner has invested or is actively in the process of investing the required amount of capital, the petition must be accompanied by evidence that the petitioner has placed the required amount of capital at risk for the purpose of generating a return on the capital placed at risk. Evidence of mere intent to invest, or of prospective investment arrangements entailing no present commitment, will not suffice to show that the petition is actively in the process of investing. The alien must show actual commitment of the required amount of capital." Therefore, your proposed plan may not be sufficient for an approval.
